Buy PSP Projects; target of Rs 1061: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Improved labour availability: Supports execution and revenue growth, with 23,000-25,000 workers deployed across sites.
  • Project transitions: From structural phase to MEP and finishing stages, driving margin expansion to 7-7.5% over the medium term.
  • Order book growth: INR 128.7bn, providing strong visibility, with a bid pipeline of over INR 78bn.
  • Debt reduction: Gross debt of INR 2.68bn, with sanctioned limits cut by INR 1.1bn, and INR 4.92bn available.

Thesis Validation Checklist

  • Revenue growth: 25-30% post FY27, driven by improved labour availability and project transitions.
  • Margin expansion: 7-7.5% over the medium term, driven by project transitions and cost discipline.
  • Order book growth: INR 128.7bn, providing strong visibility, with a bid pipeline of over INR 78bn.
  • Debt reduction: Gross debt of INR 2.68bn, with sanctioned limits cut by INR 1.1bn, and INR 4.92bn available. Investors should watch for these signals over the next 12 months to validate the analyst's thesis.